Markets Analysis

Fundamental Analysis

• U.S. employment data far exceeded expectations, causing the Dollar Index to surge.
• Expectations for U.S. interest rate cuts have been pushed back, and the market remains optimistic even in a high interest rate environment.
• High interest rates are expected to continue, with USD/JPY aiming for the late 148 JPY range.

USDJPY Technical Analysis

Analyzing the daily chart of USD/JPY, it surged to the mid-148 JPY range following the strong U.S. employment data results. The Dollar Index’s sharp rise indicates a continuing trend of dollar strength.

Given the U.S. economy’s robustness in a high interest rate environment, the dollar has become more attractive, suggesting an upward trend for USD/JPY. Specifically, surpassing the recent high of 148.80 JPY could trigger an uptrend according to Dow Theory. Breaking through 148.80 JPY could lead to a surge towards the 150 JPY range, incorporating stop losses.

For dollar straight currency pairs, including USD/JPY, the approach should be with a bias towards buying dollars.

Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour chart of USD/JPY, it has rebounded from the Ichimoku cloud’s conversion line, indicating a strong upward signal. Considering the continuing dollar strength trend, entering a buy position for USD/JPY is advisable.

Surpassing the high of 148.80 JPY seems only a matter of time, and doing so could rapidly drive the pair towards the 150 JPY range, taking stop losses into account. However, with the RSI reaching 70, a rapid decline could follow a sharp increase. Therefore, it’s advisable to avoid excessive chase buying.

The day trading policy is market buy orders. For long-term trades, aim to settle at 150.50 JPY, and for short-term trades, at 149.60 JPY. If it falls below 147.5 JPY, a strategy revision is necessary.

Support and Resistance Lines

Upcoming significant support and resistance lines:

148.80 JPY – Recent high

Market Sentiment

USDJPY Sell: 75% Buy: 25%

Today’s important economic indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.